“Illinois … has turned to some creative policy solutions aimed at providing pension buyout options for state workers. … But Warshawsky and Marchand’s lump-sum payout policy recommendation has another key component that Illinois’ buyouts lack. They stress the importance of giving pension plan participants accurate information about the funded status of their pensions. Illinois’ lump-sum payment calculations fall short of this recommendation because they rely on interest rate assumptions that do not fully reflect reality.”
Read the full article on: Mercatus Center (George Mason University)